How Much Does a Document Management System (DMS) Cost? (Video)

In a previous article, we worked through a list of some of the best Document Management Systems on the market. The goal here was to help jump-start your own selection process with a few options that we feel comfortable recommending to your organization.
Once you really begin the selection process with these kinds of solutions, though, you will inevitably start asking yourself one question: how much is this going to cost me?
This is a question we’ve heard over and over again during our tenure as a technology services firm in the DC metro area. Whether you’re looking to change your existing document management solution, or to implement a DMS for the first time, it’s important to know what to expect as far as initial and ongoing costs.
Below we’ll work through the main types of Document Management Systems, along with the average price ranges associated with each.

What are the different kinds of Document Management Systems?

Document Management Systems come in two primary formats:

1. Cloud-Based DMS. This kind of DMS—and the data that you store inside of it—will live on your provider’s servers. You’ll essentially rent space on these servers, and access the system over the Internet.

2. On-Premise DMS. As you probably guessed, this means that your system will be on-site with the rest of your IT infrastructure. Your system will run off of software that you have installed on a dedicated server, and you’ll be responsible for managing your server and desktop licensing.

Depending upon which type of DMS you select, your pricing model will vary.

What is the average price range for a cloud-based DMS?

The pricing model for cloud-based systems tends to be fairly straightforward. Here, your vendor will likely offer the solution multiple packages that range from bare-bones to all-inclusive.
Take NetDocuments, for example. Their solution comes in three flavors: Basic (simple folder-based organization), Pro+ (with email management and customization), and Enterprise (with capacity for 50+ users with more complex needs).
As you move up through the packages to “unlock” additional capacity and features, you’re also increasing your costs. Your total investment will generally consist of one ongoing monthly fee for support, maintenance, and periodic licensing upgrades.
On average, you should expect to invest between $20 and $50 per person per month, with the major variable being the level of service you subscribe to.

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What is the average price range for an on-premise DMS?

Things get a little more complicated when it comes to on-premise solutions. While additional features mean increased pricing in the cloud scenario, they can actually translate into additional hardware if your system is on-site; things like mobile access, email management, and secure file sharing capabilities will sometimes require their own server.
If you take a look at iManage, for example, you will—at absolute minimum—need one application server and one indexing server for the solution to work at its base level.
So, in this case, there are three core elements to your overall costs:

1. Up-front licensing fees. To start, you’ll have an up-front charge for your server and desktop licensing. This licensing tends run between $350 and $500 per person on average.

2. Up-front hardware costs. Depending upon which features you sign up for, you’ll need to purchase the appropriate number of servers at the average rate of $5,000 to $6,000 per device.

3. Ongoing support and maintenance fees. Ongoing support and maintenance will take the form of an annual per person fee, which will typically cost you around $40 per seat.

Note: These fees do not include software upgrades in the on-premise scenario—those will require additional projects down the road to keep your server and desktop software upgraded to the latest version.

What implementation costs can you expect?

Besides licensing, you’ll also need to budget for the actual implementation of your Document Management System. We strongly recommend that you work with an outside resource to help you through this process; rarely is it a simple task to translate your specific needs into the absolute best solution unless you are versed in the subject.

All told, this project will include:

  • Design
  • Planning
  • Piloting
  • Implementation
  • Training
  • Follow-up Support

The nature of your particular project will vary based on the size of your organization and your specific needs, but you should anticipate a 60 to 90 day process from start to finish. In more complex scenarios, the piloting phase alone can span 3 to 4 weeks just to accommodate different groups, real-time adjustments to fix issues, and generally digging into the meat of the system and how it breathes.
Regardless, you should anticipate to put at least a few thousand dollars into the labor it will take to get the system up and running.

Final considerations

Even after the solution is implemented, you’ll also need to account for the learning curve. We can’t stress this enough: by implementing this solution you are, at a fundamental level, changing the way your firm operates. This means that not only are you looking at a firm-wide adjustment period, but that any hiccups along the way can have drastic ripple effects. That’s precisely why your implementation project needs to be so intricate and complex; you cannot afford for your core software to make mistakes with your data.
Clearly, there’s a lot to consider when it comes to calculating your overall investment in your DMS. This is one of the more costly technology solutions out there, both in terms of time and of money.
If done right, however, your DMS will do wonders for your overall efficiency, along with the security of your mission-critical data. With the proper solution in place, your people will be able to work seamlessly, intelligently, and effectively, and focus their attention on achieving their goals rather than fumbling through a half-formulated document management strategy.
And that can be pretty well worth it.

Topics: law firms